A major goal in human health is to improve the ability of large fractures and skeletal wounds to heal. In contrast to mammals, many amphibia and lizards do have a remarkable ability to reform entire limb and/or tail skeletons, yet the relative lack of genetic tools in these species have limited progress towards the underlying cellular and molecular mechanisms. Here, we present a new model of skeletal regeneration in the genetically tractable zebrafish. In a matter of just a few weeks, adult zebrafish can regenerate nearly two-thirds of their lower jawbone, and they appear to do so through an unusual chondrocyte population that directly produces woven bone. As potentially similar cells have been observed during mammalian fracture repair, a better understanding of these cells during skeletal repair, as well as how they contribute to more extensive regeneration in lower vertebrates, will aid in developing novel therapies for improving bone repair in patients. In the first aim, purification and expression profiling of regenerating chondrocytes, which express markers of both chondrocytes and osteoblasts, will determine the extent to which these cells are hybrid chondrocytes/ osteoblasts. Genes specifically upregulated in early regenerating chondrocytes will also indicate potential pathways that induce these cells in response to injury. Next, we use newly developed Cre/Lox transgenic lines to test the origins and long-term fate of regenerating chondrocytes. In particular, we test that the periosteum is a major source of regenerating chondrocytes, with these directly converting into the osteoblasts that produce woven bone. Using a novel intersectional transgenic strategy to specifically ablate regenerating chondrocytes, we then test that these cells are required for the large-scale regeneration of bone in the zebrafish jaw. During the development of endochondral bone, the majority of chondrocytes undergo hypertrophy and apoptosis, with bony matrix being produced by invading osteoblasts. Quite differently during regeneration, our preliminary data suggest that many chondrocytes directly differentiate into osteoblasts. Using an adult viable ihha mutant and a transgenic strategy to inhibit Hh signaling only in regenerating chondrocytes, we test in the second aim that persistently high Ihh signaling is essential for regenerating chondrocytes to differentiate into osteoblasts. The completion of these Aims will test a model that the ability of regenerating chondrocytes to directly make bone allows a rapid restoration of rigidity in a damaged body part, with the initial woven bone later being remodeled into mature bone. In the long-term, we plan to use lessons taken from this new zebrafish model to devise strategies to augment the inherent ability of the skeleton to repair critical size defects.